Will Your Home Insurance Cover Your Next Renovation Project? What You Need to Know

by Debbie Goldberg 03/20/2022

Your home insurance policy includes a specific type of coverage called "dwelling coverage." The amount of dwelling coverage that you have is based on your overall home value and the approximate cost to rebuild your home in the event of a total loss. When you renovate your home, you may increase its value — and if you don't inform your insurance company, you may be left underinsured.

These are the home improvement projects that could affect your overall value and require you to increase the amount of insurance coverage that you have for your home:

Adding a Pool or Hot Tub

When you decide to install a pool or hot tub in your backyard, you are likely thinking more about the endless days and nights that you will spend relaxing. However, these home improvement projects may increase your home's value — as well as your liability — which may cause an insurance premium increase. It's important to budget for this when you consider the overall cost to install and maintain your new pool or hot tub.

Replacing Your Home Siding

Replacing the siding on your home will have a significant impact on your property's facade. Not only will it boost your curb appeal, but it will also increase the value of your home. The increase in value may be so high that it could leave you without enough insurance coverage in the event of an emergency, so you should inform your insurance company that you are taking on this project.

Upgrading the Kitchen or Bathroom

Kitchen and bathroom renovations offer you the highest return on your investment, as these projects make your home more appealing to potential buyers and can drive up the sale price of your house. Noting the high ROI, it's necessary to keep your insurance company informed when these projects are complete.

Investing in a Home Addition

A home addition, such as a second story or additional living space that changes the footprint of your home, will significantly change the value of your home. This is perhaps the most important project to tell your insurance company about, as you do not want to risk being underinsured after you have finished a beautiful home addition.

In order to fully understand the impact that your home renovation project may have on your homeowner's insurance policy, contact your insurance agent prior to beginning the project. This will give you an idea of the impact that your project will have on your coverage and will allow you to budget for any insurance premium increases that may occur.

About the Author

Debbie Goldberg

I'm a full time Realtor with over 30 years of experience yet young enough to embrace today's ever-changing scope of marketing and technology. Having grown up in Connecticut and moved many times (too many to count!) I can empathize with today's buyers and sellers. Strictly maintaining ethical standards and being a fierce advocate on behalf of my clients are things I take very seriously. As a buyer, you can expect me to listen to and evaluate your real estate wants and needs. I can assist in explaining relevant forms, agreements, and closing procedures. I will guide you through the process of finding the right home, negotiating your offer, adhering to all contract dates and terms as well as final walk through and closing procedures. As a seller, I will listen to and evaluate your goals, needs, and timing in order to properly price your home to get the maximum exposure needed to attract the right buyers. In addition to negotiating on your behalf, I will make sure we communicate throughout the entire process as we navigate the contract terms, finance and inspection contingencies, as well as all closing procedures. I was born in Japan, grew up in Hamden and lived in New York, Ohio and Southern California before settling down in New Haven county to raise two kids, two dogs and a cat. I'm passionate about good food and love to bake. Some of my free time has been spent volunteering at Temple Beth Sholom, a synagogue where my family has been members for over 40 years. I also spend time at Tower One/Tower East, an assisted living center in New Haven where my mother-in-law now resides. 30 years of helping buyers and sellers achieve their goals has given me the peace of mind to know that what I do everyday matters. If you are thinking of buying or selling please keep me in mind.